Zoetis (ZTS) Upgraded to Buy: Here's Why

Core Viewpoint - Zoetis (ZTS) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Company Performance and Outlook - The upgrade for Zoetis indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - Zoetis is projected to earn $6.20 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 4.7% [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of Zoetis to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].